>> steve: absolutely. brian, you have 8 seconds left in the program. >> brian: okay. join me on the radio. >> gretchen: or log on for our after the show show. new turn in the scandal that cost the cia director david petraeus's job. the pentagon now investigating general john allen. you know who he is? the top commander in afghanistan, for allegedly exchanging thousands of possibly inappropriate e-mails with, this woman, jill kelly, tampa, florida. she is a close friend of the petraeus family who sparked initial investigation into the cia director. that is what we've been told so far. follow the bouncing ball. it is a tuesday. martha: try if you can, right? good morning i'm martha maccallum. you will need a flow chart to follow this story as it develops because the cast of characters in this growing saga. the pentagon we're told is sorting through 20 to 30,000

pages of e-mails between this woman and general allen. she got, the fbi involved in the whole thing because she said that she was receive ofing harassing e-mails from this women, petraeus's biographer and ex-mistress, paula broadwell. bill: got all that? martha: i think so, you need a pen. catherine herridge is live in d.c.. tell us where we are today on the investigation. where is it. >> reporter: thank you, bill and good morning. so far virtually every publicly threat in the case leads back to jill kelly, a woman described as this unpaid social liaison for the military in tampa, florida. this morning it is alleged the commander of international forces in afghanistan, or isaf, general john allen, sent between 20 and 30,000 pages to kelly. e-mail traffic described as potentially inappropriate nature. it was jill kelly who alert ad fbi agent what she believed were harassing

e-mails from the paula broadwell, the biographer and mistress of general david petraeus. it was investigation of kelly's complaints that ultimately forced resignation of general petraeus last week. spokesman george little gave a brief statement on general allen's status. >> while this matter is under investigation and before the facts are determined, general allen will remain commander of isaf. general allen is entitled to due process in this matter. >> reporter: as this story literally metastasizes the first hearing on benghazi will begin today before the senate for rinse relation committee. it is classified and closed to the public and media. that is what we expect for a handful of hearings scheduled for this week. bill: let me get this right. the petraeus matter is under investigation and no one knew about it publicly you about john allen is now under investigation and it is a major headline. what is the difference between the two or is there

a explanation for that, catherine? >> reporter: i'm not sure there is a good explanation. certainly what has my attention the way it appears the releagues of information on these investigations was slow walked right up to the period of the election because we've had a real burst of information, some of it extremely public, like the raid on paula broadwell's home in north carolina late last night. an event like that prior to the election would have garnered a lot of attention from the media and would have been very hard to sort of explain away as a random event. now that the floodgates have opened on general petraeus it does seem we're in for the new information about general allen and potentially others as well. bill: do we have time for one more? if so quickly, tell me where is the fbi's investigation now? >> reporter: well i just mentioned there was this raid on paula broadwell's home in north carolina. what we could see there is agents, this is pretty typical, taking away boxes and bags presumably of evidence. they were looking for more

information about her relationship with general petraeus. i think that's significant because one of the key factors here is when that relationship bee sfwan. -- began. what is publicly said after he left the military and he was director of the cia though military sources in afghanistan have told fox news this relationship between petraeus and broadwell seemed to be a open secret when he was in afghanistan. if this relationship took place while he was still a general in afghanistan this could open him up to prosecution within the military system and especially broadwell as well because she is serving officer in the reserves. bill: catherine, thank you. >> reporter: you're welcome. bill: if you get more while we're on the air we'll bring you back. catherine herridge leading our coverage in washington. martha: meanwhile a ghost writer on paula broadwell's biography is speaking out. he said he was clueless to what was going on. things seem much more clear to him in hindsight.

>> what was a question in my mind quite frankly was why general petraeus was granting paula broadwell the kind of access he granted her. i never fully understood it. i always sort of rationalized in my own mind he felt he could control and that because it was so public, that both of them felt there was never any danger of it becoming anything other than, you know, journalist/subject, professional relationship. martha: lobe says he had no idea when the affair began. he says his wife thinks he is the most coolest man in america. catherine herridge was telling us it was somewhat open secret a lot of people apparently were aware of. which raise as big question why it had to become so public at this moment? bill: the last man to head the cia was leon panetta. petraeus took over from him when he took the job as defense secretary. now panetta was asked about

the situation on his way overseas late last night. roll this. >> first, obviously it was a, it was a very sad situation to you know, have a distinguished career like that end in this manner, and my heart obviously goes out to him and to his family but i think he took the right step and i think it's important when you're director of the cia with all of the challenges that face you in that position that, you know, that personal integrity comes first and foremost. bill: so secretary panetta was also asked by reporters if the fbi should have alerted key members of congress about the investigation sooner? panetta saying that is something that should be looked at. martha: well the fbi is now preparing a timeline of its investigation to respond to

lawmakers who think that they were told too late. this is it what we know so far according to a senior member of the obama administration. on wednesday the director of national intelligence known as the dni, james clapper, apparently then informed the white house about what was going on with general petraeus. the next morning director petraeus called to request a meeting with president obama and then president obama was briefed on that situation and he did then meet with petraeus that afternoon and petraeus offered his resignation. we're told the president decided to take the evening to think about he did indeed accept petraeus's resignation the next morning on friday. the day afterwards, the michael morrell was aim named as acting director of cia they have a close relationship record according to reports. morrell was the one of primary briefers during the planning to take out usama

bin laden. all of this raising a lot of questions. bill: as you can tell. so many of those questions are remaining unanswered. one of the lawmakers who feels congress should have been informed about this matter is matt thornberry, member of house intelligence committee. we'll talk to him live. we'll see which way the worm turns this morning. martha. martha: go back to the economy for a moment because there is a dire warning to lawmakers on our economic future. moody's investors service says the u.s. still get as negative rating because of the uncertainty surrounding the so-called fiscal cliff. all of this comes as congress today returns to work on capitol hill for their first session since september after a hard-fought election. paul ryan is now speaking out for the first time. he says he is ready to reach across the aisle. >> it's part of my job to be a part of the solution to try to make this divided government work because the issues we talked about seven days ago are still the issues we have to deal with today, the economy, a debt crisis. we have got a health care

system problem. i worry about our military. these same problems exist and we'll have to find a way of finding common ground to make them work. martha: paul ryan who hoped to be vice president of the united states come january, now finds himself in his congressional seat still in wisconsin and says he has got his work cut out for him. stuart varney joins me. host of the "varney & company" on the fox business network. stuart, your thoughts, first of all on what ryan had to say there? >> can i drag this back to what you called, martha, a dire warning and it is a dire warning and that was talked about by paul ryan right there. the dire warning is from moody's. they rate our debt. they say whether this debt is good or bad. they're saying, look, you've got to get a deal on this fiscal cliff and it can't be just any old deal, it has got to be a real deal that offers a real chance, a real certainty that our debt will come under control in the future. they want a fiscal cliff deal. if you don't get it, i think

it's got to be a real deal, then we will be downgraded, not just continuing under negative watch as they say, we will be downgraded. we will lose our aaa rating which we have at the moment according to moody's. they won't let us punt. they won't let us kick the can. you just can't keep things as nice the middle of 2013. no, there has got to be a solid deal and that deal must include the reduction of debt at some point in the future. martha: this administration was the first to preside over a downgrade of u.s. debt. we hope this isn't something we're going to get used to and see the same thing come from moody's. but as you point out, stuart, what they're looking for is a serious plan to cut spending. >> yes. martha: that is not something we've heard, the administration would say yes, we have put out there trillions of dollars of spending cuts and they couldn't get them passed. where are we in terms of all that in terms of cuts. >> it can't be a promise of cuts down the road.

it has to be a tangible plan. it has to be solid out front statement, we are going to do this, this and this. this really adds to the pressure on these negotiations. we already heard if we go over the cliff we get into recession and 9% unemployment. this from moody's says, get a deal, a real deal or we'll be downgraded and that has all kinds of consequences for all americans. martha: it is interesting. seems to be only one branch of government in power now, the house of representatives said from the beginning they really want to see real cuts and real tax reform. they will have to get their heads together. so we will see. >> correct. martha: stuart, thank you so much. bill: 11 minutes passed and we're getting fired up. new fallout from the president's health care law. big american companies are talking about how they will cut costs. what does that mean for you? we'll tell you about that. martha: serious questions remain after the stunning resignation of cia director david petraeus. why did it happen now is one of the big questions?

why did it take so long for news of this investigation to reach the oval office? congressman jason chaffetz wants answers. >> look, general petraeus is not the head of fish and wildlife for goodness sakes. he is the head of the cia what he eats for breakfast will show up on intelligence reports. of course he is immediately compromised and you have to deal with that immediately. it better have gone to the president immediately and it should gone to the house and senate intelligence

oh, let me guess --ou see this? more washington gridlock. no, it's worse -- look, our taxes are about to go up. not the taxes on our dividends though, right? that's a big part of our retirement. oh, no, it's dividends, too. the rate on our dividends would more than double. but we depend on our dividends to help pay our bills. we worked hard to save. well, the president and congress have got to work together to stop this dividend tax hike. before it's too late.

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if you're thinking about your options, call today. when you call, request your free decision guide. and find the aarp medicare supplement plan that may be right for you. --. bill: let's get back to this investigation right now, the resignation of cia director david petraeus. lawmakers want to know why they were not informed of the matter with many finding out through the media on friday afternoon. general petraeus was set to testify this week on benghazi. many still want to hear from him. will they? mack thornberry, republican congressman, member of the hoist intelligence committee. good morning to you. let's go through this

efficiently and quickly as we can. you found out about it on television. is that the proper course or is this something you need to know before the public finds out? >> i think it is unusual. that is the way i found out. as you heard a few moments ago, this is not the director of fish and wildlife. this is a top national security official and the questions we're going to have is, was the timing related to the election? that's what we're going to pursue. bill: i wonder how you prove that? look at a couple possibilities here. eric holder apparently was informed late in the summertime. did he or should he have notified the president at that point or in the days or weeks after? >> oh, i think absolutely. anytime you have something in touching on a sensitive position like the director of cia the president needs to be notified immediately and i would suggest that at least the chairman and ranking member of the congressional intelligence committees need to be notified immediately. turns out it was months later on both counts. bill: the fbi director

mueller, meets with the president once a week, right? routinely informs him of sensitive information. would this scandal rise to that level when you're talking about the potential as we know now, the reality for your cia director to go down on this? >> well my view is immediately when there he is an investigation that could touch on your cia director the president needs to know immediately. he needs to know that they have incomplete facts. it may not amount to anything but it is such a sensitive position that the president and the top people in congress need to know as soon as it starts. bill: general allen is running the war in afghanistan. he took over for david petraeus to run the war. why do we now know, maybe there's a distinction, maybe there's not here but why he is under investigation at a time when general petraeus was under investigation and the lid was kept on that? what's the difference? >> well i think that now this matter has become

public and so more aspects of it are becoming public after obviously the election is over. you know, this thing gets more bizarre and we're all focused on the personal interactions here but there are serious questions of national security that also have to be examined. i think that is what you're going to see congress really hone in on in the days and weeks to come. bill: you want to talk to petraeus i'm sure, right? >> absolutely. bill: do you think that will happen? >> i think it should happen, especially about what he knew and what he ordered related to the benghazi affair. we're still focused on how that came about, what the lapses were, what we can learn to prevent it from happening in the future. in addition, now we've got the possibility, the national security information could have been compromised and obviously we will want to find out what the fbi finds out and the other investigation where that leads in that part. bill: you know david

petraeus. you know him at least professionally. >> sure. bill: it strikes me would want the truth to come out? >> absolutely and i think it needs to be said the way he has handled this once it became public has been incredibly honorable, very consistent with a lifetime of service and so i have no doubt about that. if, you know, he is going to have to consider his legal situation if any of those reports are actually true but the key is we need to learn the lessons as it affects the country's national security, not just as it affects the soap opera aspects of this story. bill: on the soap opera aspect, jill kelly, 37 years old, lives in tampa, florida. how does the private citizen get the fbi to investigate e-mails on the surface said to be threatening but if you look at least what we know now they were somewhat innocuous? >> those are part of the questions we don't know the answer to. how did this investigation

begin? who all knew about it? how long did it go, particularly touching on individuals woe now know were involved and we may not know the whole story yet. there are lots of questions to pursue here both from an fbi investigative standpoint and from the larger national security standpoint. bill: i think you're exactly right. there is lot we don't know. the president held a press conference on friday at 1:00. this news on petraeus was held to 3:00 in the afternoon. the reporters did not have a shot to ask about this. at some point they will. the mack thornberry, good to have you on the hill. martha. martha: a software mogul at the center of a major murder investigation. why police are looking for the man who started mcafee anti-virus software. crazy story, we'll tell you that. bill: sure is. parts of brooklyn, new york, struggling to recover from sandy. that's where we find jonathan hunt. >> reporter: bill, hundreds of residents here in

coney island still lining up to get the bare basicking of life, food, water, batteries, flashlights, this two weeks after hurricane sandy hit. we'll be back after the break with a whole lot more how these people are trying to cope, trying to recover.

bill: you know a lot of people unhappy about last week's election results. so much so they're signing online petitions to have their states secede from the union. people in at least 20 different states signing these petitions shown on the map here. the first petition reportedly was filed the day after the election by someone in louisiana. then later by a texan. the reports state that the obama administration can decline to respond to a request and that it remains to be seen any type of response or recognition will

be given to these petitions. martha: wet weather and falling temperatures are what folks are dealing with right now. that is making a miserable situation even worse for the victims of hurricane sandy this morning. folks lining up since early this morning at a distribution site to try to get their hands on some basic necessities and that's where we find our reporter, jonathan hunt, live in brooklyn, new york, this morning. how are they doing there this morning, jonathan? >> they're doing best they can, frankly, martha. this has become a daily routine for many of these people on coney island. the sun comes up with it the lines start forming. what they're here to pick up and what will be laid out along all these tables over the next few minutes are the very basics, food, water, d on theaning supplies. tables. the line will file around and they will be able to take what they believe they need. they spoke to a couple of those first out here today. i have to say the spirit of these people is still extraordinary.

they're just grateful. listen to this. >> this has given me enough basically. i'm glad me and my daughter and the rest of my family are still okay and since they're giving us food and everything else, you know, right now i don't have work but at least they're supplying, supplying us with something to eat. >> i try not to stay in the line too long. i suffer from my back. the cold hurts me. i have to come down. i don't know how long they're going to be here. and i need a few supplies. >> reporter: pretty extraordinary when you think how many homes were thoroughly destroyed by hurricane sandy, martha. but the spirit of these people have not been destroyed in any way. they're determined to get through the best way they can, martha. martha: i want to ask you about mayor bloomberg and what he will announce. my first question, who is providing all of that? is that a fema facility or is it red cross behind you? >> reporter: this is a mixed facility. fema is here. there are state and local

officials here. a lot of volunteers are here. this one is mixed. then you were talking about what mayor bloomberg is going to announce, in a couple hours time we'll hear from him about the setting of what he calls some super distribution centers which will have all of this kind of thing, the basic necessities but will also have mental health experts on hand, medical supplies on hand. insurance experts on hand. so it's, the point of it is to make it sort of a one-stop shop for everybody who has been affected. as we move around here you look at the apartment buildings, a lot of these people live in, many of them now do have power but they don't have heat. they don't have lights. so they're hoping they can go to these supercenters that new york is now setting up and get some answers to those questions, particularly when they get the heat back because it is getting pretty darn cold out here right now, martha, i can tell you that. martha: temperatures are supposed to drop in the coming days. it is starting right now. it is such a rough situation

for these folks. their nerves are frayed. you can not blame them. we have to have a lot of compassion and a lot of help for that area. jonathan, thank you so much. >> reporter: yeah. bill: the scandal over david petraeus and the cia growing by the day. the man leading the war in afghanistan, he is now under investigation. the father for one of the women involved says this is all a smokesscreen rather about something much larger. if he's right, what's next? that debate in three minutes. >> today, the secretary directed that the matter be referred to the inspector general of the department of defense for investigation. and it is now in the hand of the department of the inspector general. made a commitment to the gulf. bp has paid over twenty-three billion dollars to help those affected and to cover cleanup costs. today, the beaches and gulf are open, and many areas are reporting their best tourism seasons in years. d bp's also committed to america.

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martha: back to our top story now. republican lawmakers are questioning the timing of general david petraeus's investigation and resignation. he was supposed to be testifying this week on thursday on exactly what really happened in the terror attacks in benghazi. now that is not happening. at least his testimony. and here is congressman jason chaffetz on this. >> it is so suspicious. it is not a coincidence to me. he is the one who probably knows most about what happened or didn't happen in benghazi. if this is many looking over his head when he went to go brief the united states senate, did that influence the way, the direction, and the story that he told? a lot of senators don't believe he was telling the truth then. this begs more questions

than it answer. >> the father of the woman at the center of this scandal says that he believes this is all just a smokes skeen. this is about something else entirely and truth will come out. there is lot more that is going to come out according to mr. broadwell. you wait and see he says, a lot more than meets the eye. jemu green, fox news contributor, andrea tanteros, daily news columnist and co-host of "the five". good morning. andrea, let me start with you. do you agree with jason chaffetz and paula broadwell's dad? >> i think there is probably more that meets the eye because new details are emerging every single hour, martha. here is my issue. how could, how could they tell us or how could sources be telling us, a source told me on friday, that the affair has nothing to do with benghazi? general petraeus was looking forward to testifying at the hearing. then we learn he is not going to be testifying.

chairman mike rogers says he may invite him to testify as a private citizen. but the biggest question here, you have the sex scandal and you have benghazi. and answers that people need to know are the two related? why isn't he testifying? why isn't senator clinton testifying? did the white house know about this? and did his answer that it was driven by a video, which is what he told congress after the benghazi attack, did his answer have any connection to his personal indiscretions? i think that is the most important question. martha: we know general petraeus made a site visit. he went to benghazi and i heard senator dianne feinstein yesterday, jemu, i will ask you take this on they still haven't received a report from petraeus's site visit in benghazi. they expect that information. we're told he will not testify now but testify down the road. seems him testify something extremely important to finding out what went on there. >> i would absolutely agree with you, martha.

i don't think because he resigned it means that we're not going to hear from him under oath. andrea is absolutely right. there are two separate issues here. there's the sex scandal and there's benghazi. and the conspiracy theory, cover-up aspect of this, trying to immediately combine these two things i think is happening way too soon before the facts have come out. one of the most outrage just conspiracy theories that i heard or read just last night that eric cantor, since he knew about this before the election, he didn't let it out to the media because he has some jealously or rivalry with paul ryan who is the vp candidate. these things are outrageous. the fbi, the cia and congress need to get the facts out. of course congress needs to be asking those questions. just because you resign doesn't mean that congress isn't going to sum mount -- summon you up and make you answer the hard questions about benghazi.

martha: paula broadwell's dade think there is is lot more to this. you don't want to speculate but as you both have recognized every day there is more and more coming out on this there is the question, we heard about general petraeus's indiscretions after it was withheld for a long time. now suddenly we hear about admiral allen, general allen as well, that he was involved with this as well. what the white house knew and when they knew it and all of that. andrea, how do you put these two together? >> i think it will take time. another question i think is very important and it is raising a lot more questions is the footage of broad well, in a speech in october mentioning that the consulate could have been hiding militiamen and that could have triggered the attack. i'm wondering if this broadwell woman told her father about more classified information that we don't even know. martha, we have the white house telling us they didn't know about a investigation? if they didn't know, my question is who is about to

be fired. we know eric holder found out about it in august. he knew about it but the president didn't know about it and mike rogers and the senate intel chair didn't know. why wasn't congress told about this high level investigation, again they stumbled upon? i'm just not buying. i don't think a lot of people are buying the answers we've been given. martha: even the administration said, jemu, in the morning papers they understand that the timing looks odd. that the day after the election general petraeus would put forward his resignation. but in your mind jehmu, what do you think is the reason for not allowing this to come out sooner? why did they hold back and they slow walked as catherine herridge said? >> i think you also have to look at the timing of when the investigation first started. does it, they understand that it does look fishy from a timing standpoint. if there was going to be a cover-up or any sort of conspiracy here, wouldn't they want this to come out way before we were close to

the election? it just seems people are wanting to jump to conclusions when we're still trying to figure out, is this policy or is this just behavioral? is this men being men? you know, miss broadwell's father is absolutely right. there is lot more here. he said that, guess what, 30,000 e-mails came out of another potential affair that could be engaged here. we have to get these facts out and jumping to conclusions does not do this situation any justice. martha: you have to go back to mueller as well at the fbi. why would the fbi be willing to take this on for this woman? why would they do this investigation of e-mails? what is the fbi's motive in all of this? andrea, just real quick, if you can a thought on that. >> that's another thing. it doesn't add up. she felt she was being harassed so she called the fbi again they just happened to stumble upon the man involved in this as general petraeus? i think the biggest question again, martha, four dead americans, potential

cover-up after benghazi. did this affair affect the cover-up or the alleged cover-up. >> or was it just "gossip girls.". martha: also the fact that this story gets so much more attention all across the networks and all across the media than benghazi and death than murder of our ambassador ever did another thing we'll look into and talk about. jehmu, andrea, thank you. we'll see you later. bill: turkey is threatening to step up its military response to border violence by syria. today is the second day of an air bombardment by syrian warplanes. here is the video. listen to this. [explosion] bill: that is a fierce line of weaponry there. leland vittert live on the ground there in jerusalem with the latest and what is happening now. leland, hello. >> reporter: good morning, bill.

the big concern right now regionally is just how close syrian civil war is getting to its borders. the video that we are seeing of those aerial bombardments by the sir union air force is coming from turkey which is now threatened to shoot down any syrian planes that end up inside its airspace. that could cause a whole host of issues and ripple effects going on. air force is still the syrian regime's trump card going forward. they have been able to bomb with impunity. rebels are trying to get more organized. britain and france are denying giving them anti-aircraft missiles to. bill: what is turkey going to do with the refugees, leland? >> reporter: it is becoming an increasing problem. you can see at the same time these bombings happen, tens of thousand of people fleeing across the barbed-wire fence separating syria and turkey. they have to be fed, clothed

and housed because it is getting colder inside turkey. they are treated medically. many have shrapnel wound from this war. it is becoming very, very difficult for turkey to deal with. more than 100,000 plus people inside its borders. bill: leland, thank you. in jerusalem as the war continues to widen. thank you, leland. martha: a check of the markets 11 minutes into the trading day right now. investors reacting to the situation overseas as a deal to rescue the greek economy looks much less certain. shocking, right? the dow closing down slightly yesterday, to finish at 12,815. we'll keep an eye on the markets and how they're going in the united states after the election. bill: a little iffy would you say? a little up, a little down. some major american companies are learning they may have to pay for it in ways this they never expected and how will this affect the employees? we'll break that down next.

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martha: a pair of snowboarders are trapped on mount rainier and they have made some contact with rescuers. the two initially radioed for help on sunday after they got lost in a home. they still can't reach them who are still 7500 feet up the mountain but they made visual contact with them. the snowboarders have winter gear and smartphones and a compass. they have no overnight gear. they spent the night using a snow cave for shelter. we wish them luck. bill: smart fellows. way to do it. new fallout from the president's health care law. a number of major american companies, big names now, announcing big changes. wal-mart saying that employees will have to pay between eight and 36% more in premiums. leaving some to say they will skip the coverage all together. applebee's will be laying off some of its workers and will stop hiring new employees. that from a franchisee. papa john's pizza says franchise owners might have to cut employee hours.

stephen moore has been looking at this, senior economics writer for "the wall street journal" welcome to you and welcome back. >> high, bill. bill: what do you think the big effect will be as you analyze today? >> it is funny, bill. last week or so everybody has been panicked over the so-called fiscal cliff when we should be really focusing on is the obamacare cliff because this also hits in january. it is a major new cost for employers. and especially the kinds of companies that you were just talking about. domino's pizza, applebee's restaurant, construction firms, retailers, that are highering people that make maybe 15 or $20 an hour. employers i talk to in that category are saying they believe that the obamacare law will cost them somewhere between $1,000 and $2,000 per employee. that is a lot of money that could really cut into hiring. bill: let me, into hiring you think? >> yeah. bill: jobs is what is critical here? >> i think so. i think think a lot of these

businesses, there is twofold impact. a lot of businesses will not hire full-time workers. they will, a lot of firms will cut back on hours to save on labor costs. the other thing to think about, bill, there is a 50 employee limit. if you're under 50, a lot of these laws don't apply. if you go over 50 employees they do. it means a lot of businesses are telling me i'm not going to hire that 50th or 51st employee because i can't afford all these new costs. the point is this will hurt employment at a time when we have high unemployment rate. a lot of members of congress saying whoa, maybe should put a halt on this until at least we get unemployment down to 6 or 67 1/2%. >> don't go over 50 employees, unless you got a waiver of course which were handily passed out two years ago? >> exactly right. bill: just to be specific on the applebee franchises. they say we have calculated the costs. it will cost millions of dollars across our system. >> right.

bill: the mentioned papa john's. ceo was a mitt romney supporter. last week he said he would reduce workers hours as a result of this and pizza price would go up 14 cents for every large pizza. now you're starting to see how it is literally baked into these american companies, right? >> literally baked in. that's exactly right. the problem is when obamacare was sold to the american people it was appealing message that appealed to a lot of us we will lower these costs, health care costs for employers all over the country. a lot of employers bought into that. they're looking at cold reality, bill. these costs are not falling. premiums will rise. something hag to give. you pay more for products or businesses hire fewer workers or not going to hire a 50th worker. i find it to be a tragic situation. if i were congress, let's get unemployment rate down before we put all new costs on the backs of businesses. bill: remember cbo director

doug elmendorf, he predicted 850,000 jobs would be on the line with obamacare. is that true or is that happening now? >> it looks like he was being conservative. that we could see over a million jobs lost by this bill. remember, you're talking about businesses right now, bill, that have very thin margins. they're not making big profits. you can't put these additional costs on them. look, businesses are in business to make profits, right? if they can't make a profit by hiring extra employee, they won't do it. this is bad time to be putting those costs on. bill: thank you. stephen moore, "wall street journal." to our viewers at home got a question, hemmer@foxnews.com is e-mail. or @billhemmer. fire your question because you asked, bya for folks like steve moore and others. thank you, steve. martha? martha: you may not know him but you probably use his software all the time. a major computer mogul is now wanted for murder. we'll tell you about his unusual and extraordinary

plea as the police move in. bill: also the clock it is ticking for the president and the congress to avoid the so-called fiscal cliff and deal with america's crushing debt. a key senator on the major sticking points and what must be done to avoid a financial and national calamity. >> instead of racing tax rates on american people and accepting damage it will do to the problem, let's start solving the problem. let's focus on tax reform that closes special interest loopholes and close lowers tax rates are you receiving a payout from a legal settlement or annuity over 10 or even 20 years? call imperial structured settlements. the experts at imperial can convert your long-term payout into a lump sum of cash today.

bill: we have breaking news on a picture you don't see every day. this is daly city, california, just south of san francisco. that is a water main break. it is literally flooding that hillside, down into that street area, and the homes in this neighborhood. some of the homes have been evacuated according to

police. and also a spokesman for the water and wastewater resources in daly city. flooding now impacting the area around this intersection you see here. that is near hilltop park if you know the area. they have got a mess on their hands right now. it is happening in northern california. we'll keep track of it for you right here on "america's newsroom.". martha: you mentioned this earlier. a u.s. software mogul is at the center of a south american murder case. you may recognize john mcafee's name because the software probably pops up on your screen all the time, mcafee anti-virus software? apparently he is living in bee lose. police want question him in the death of his neighbor -- belize. rick leventhal in new york with the latest on the story. >> reporter: good morning, martha. millions of people have the program loaded on your computer. you see his name every time you log on. john mcafee invented anti-virus computer software wanted for questioning in a

murder in central america. mcafee was a consultant for lockheed back in the late '80s when he created his software company. sold the business for $100 million. he bought homes and businesses in belize and settled there back in 2008 and sunday, mcafee's next door neighbor, gregory fall, was discovered by his house keeper in a pool of blood with a gunshot wound to his head. fall, 52 years old, was a builder from florida. the two men were at odds apparently for months. earlier this year mcafee filed a complaint accusing fall of poisoning his dogs. according to a story on foxnews.com. the 67-year-old mcafee became heavily involved in drugs, prostitution, violence. reportedly using bath salts and scaring locals walking around the beach with a gun. wired.com spoke to mcafee shortly after the murder. mcafee claims he is innocent and may have been the intended target. i thought they were coming for me. they mistook him for me. got the wrong house, mcafee is quoted telling the magazine.

he is dead. they killed him. it spooked me out. mcafee, blames the government for killing his dogs, not his neighbor and is in hiding fearing police will kill him. police want to talk to mcafee, a person of interest but no arrest warrant has been issued. martha: that is a crazy story. >> reporter: it is. martha: thanks very much, rick leventhal. bill: another day, another general, another investigation. the petraeus matter grows and the jennifer griffin is standing by live at the pentagon. she will have today's latest. martha: breaking news on that coming up. we're expecting major shake-ups in the president's cabinet. some familiar names are being floated. they are already sparking controversy. what do they tell us about the second term? we'll be right

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call now to request your free decision guide. and learn more about the kinds of plans that will be here for you now -- and down the road. i have a lifetime of experience. so i know how important that is. martha: there is a new twist yet again to the sex scandal that toppled former cia director david petraeus. the top commander in rio de janeiro is also under investigation for contact with the woman in the lower part hand

part of the screen, joe kelly. we start a new hour of "america's newsroom." on this tuesday. bill: good morning to you, martha. what is going to turn next in this thing? the pentagon pouring through 30,000 pages of emails between general allen and this woman jill kelly who makes her home in tampa, florida. jennifer griffin is out at the pentagon now with more on this and how did this lead to the top demander of u.s. forces fighting the war in afghanistan, the man who replaced david petraeus. >> good morning, bill. remember when general petraeus was the head of s itcom down in central florida, general allen was his deputy there. he followed general petraeus out to afghanistan when he was made the head of the cia. general allen and general

petraeus were both in sitcom in tampa florida, and they got to know this jill kelly, a well-known socialite in the area. she host eud hosted a of parties for the top brass. she got to know them. it is clear that the tk-rpblg dod thinks there may be evidence of an inappropriate relationship and he pouring through 30,000 pages of email traffic between general allen and jill kelly. if they do find that there was a relationship of a sexual nature then he could face charges under the uniform code of military justice. we have a statement from afghanistan, from isf there. it says we are aware of the statement issued by the u.s. secretary of defense concerning a matter under investigation that may involve general allen. isef command tkefrplt it is our policy now not to comment on the

statement but to refer all questions to the office of the u.s. secretary of defense. we phone lee heard kwreud from thyesterday from the defense and his spokesman as they were en route toia where they learned about this twist in the saga. bill: petraeus' investigation there was a lid on that, nobody knew about it, until it went public. now allen is being investigated and that is being talked about publicly, it's being reported. what is the difference between the two, or is there? well, i think all -- i don't think we know where this investigation is going to finally lead, or end up, but it is clear that the daisy chain of events that led to the investigation now into a second general in the military is -- was the initial complaint that jill kelly made to the fbi, a friend in the fbi we are told who lived now in calm tampa. we now understand that that

investigator is being investigated because he became obsessed with jill kelly and sent topless pictures of himself to jill kelly. she received ha ration emails, she didn't know where she was coming from, they ended upcoming from petraeus' mistress, paul a broadwell. when the fbi started going into the emails that's when they then discovered that jill kelly and john allen may have had an inappropriate relationship, and so we'll let you know when we have more, bill. bill: you've got a long, busy day, jennifer. >> reporter: thank you. bill: as if you haven't had enough already. thank you for your reporting. exactly. martha: it is a tangled web that is being woven here. first petraeus and now commander allen. how far does this scandal go? what is the meaning of all of it and what should we know about it? john bolton joins me now, former ambassador to the u.n. and fox

news contributor. good morning to you. >> good morning, martha, glad to be with you. >> what do you think? >> i think there is an amazing difference between what happens after november 6th and our election and what happened before it. as you were asking before how is it that the allen investigation is treated so much differently than the petraeus investigation, a lot of facts we don't know, but certainly this is post november the 6th and whatever the political consequences, they are very attenuated for the president. i think the real issue of course we need to go back to ultimately is benghazi and what happened on september the 11th. but i think also this question of how politicized our national security has become under the obama administration and the effort to push everything past november the 6th really now is something that congress and other political leaders need to focus on. martha: i want to ask you about all these emails and what these folks are up to and how they've got all this time to do this stuff. the first question i want to ask you, is the way that the media and the country has dealt with

this. juxtapose with how they dealt with benghazi. we lost four people, including the murder of a u.s. ambassador and it was tough to get that story on a lot of front pages around the country. there were certainly some news outlets that picked it up, certainly fox news has. what do you make of this obsession with this story versus that one. >> again i think a lot can be explained by the passage of the magic date of november the 6th. this is really an opportunity for the media to engage in their famous investigative reporting skills. but its impact on the presidency will be very minimal. he's not going to face re-election again. there are now no ramifications for officials in his administration who withheld information, didn't act on information about possible compromises to national security, possible lapses in judgment that led to the killings in pentago in

benghazi. it's a cost-free investigation now for the media and their friend in the white house. >> is there any reason to think that this investigation goes back to a desire to remove these men from their positions, and to sort of move on and put some new people in charge of these positions? >> well, you know, it's very hard to say how this came as it did i. think the lynchpin, the absolutely central point here is the role of attorney general eric holder. we know from the "wall street journal," from fox' own reporting that he knew of the petraeus situation in the late summer, and yet two months go by and there is no indication he tells the president, no indication he does anything except sit on it. if he did sit on it i think that is poe lit sizing the process. if he told the president and that was concealed i think that is politicizing the process. i think we need to look at eric holder in the late summer and ask what did he do with the information that he had about

the potential compromise of the security of the cia director. martha: we may once again see eric holder brought before congressional hearings. dianne feinstein would like to talk to him and ask him those same questions. we'll see how far that goes and how far up it goes. john bolton always good to talk to you. bill: who is jill kelly. this is what we know. 37 years old there from a lebanese family immigrated in president late 70s. her and her husband, a well-known surgeon moved to "tampa two" years ago. she works as an unpaid socially aeu son at an air force base in tam path. the two have hosted gatherings for military officers, some bases in the area and apparently they have been friends with general petraeus and his wife holly for five years. she told a friend that she started receiving harassing emails from paula broadwell this past may. and that's when we are told the f.b.i. started its own

investigation. martha: she had no idea that this would lead back to petraeus and what would happen to him. president obama is beginning the new push of his plan to hike taxes on the wealthy in talks this week with business leaders. several ceo's will meet with the president at the white house. many of part of fix the debt campaign with deep washington ties. labor leaders will meet with the president today. we will have a little bit more on this later this hour. charles payne says he thinks there are job creators missing from the group. bill: we are two weeks after sandy and tens of thousands of your americans are still in the dark from long island and new jersey victims are still waiting for power, and businesses are shuttered. they cannot open. a devastating economic blow during one of the busiest times of the year right now. >> these small businesses run on a day 0 day basis, they really do. to pay your bills you need to work every day. we have businesses in town that

have suggested that they are not going to reopen, that they just can't afford to do what is necessary to bring that business back. bill: the homes and businesses along the jersey shore are picking up the pieces, beginning to rebuild, slowly they go. molly line is in new jersey now. what are you seeing out there today, molly? >> reporter: you know, there are places that certainly are working towards recovery and a lot of others in very difficult spots. this is one of the neighborhoods hit so far, this is sayerville. this is a working community. 40,000 people hit here. every household item you can imagine has been put out on the streets. one of the toughest things that happened here is a lot of the foundation was washed out by the river that came up into this neighborhood all the way up to the telephone lines. we've seen the masons out today really collecting things from people's basements. bill. bill: we have looked for the bright spot throughout this entire ordeal. you are finding some there, and what have you found? >> reporter: well, some of the good news i suppose across the state of new jersey is that most

of the power has come back on. there is some conflicting statistics out there as to just how much of it is still out. yesterday afternoon state officials said there were under a thousand people but there are still homes like this, you see the orange tag on the door, that the power won't be turning on until things can be fixed. the foundation of this home has been washed out as well, just like the neighbors next door have had some water damage. another bright spot is most of the kids are able to get back in school, about 99% to nearly a hundred percent of the schools are back in session, and those that aren't, the school officials are working to find another place, so those kids can continue to try and get back to normal. there are places like this that it's still going to be quite a while. bill. bill: molly, thank you. molly line out there again today in new jersey. martha: meanwhile the red cross is defending its response to sandy. they are calling it, quote, flawless there their response. there are some cold and hungry and angry victims who had a bit of a different opinion. we spoke to one yesterday.

we'll talk about the red cross about what they are doing with one of their top folks. that is coming up. >> they are trying to hammer automatic a deal to stop the country from heading over the old fiscal cliff. who is coming to the white house today will show you where the president is on this deal. >> putting a national anthem on ice, why one hockey player is coming under fire for a plan to save it at game time. >> i don't agree with it. i think it's a bad plan. i think there is another time when it can be cut.

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...protect water - through conservation and self-contained recycling systems... ... and protect land - by reducing our footprint and respecting wildlife. america's natural gas... domestic, abundant, clean energy to power our lives... that's smarter power today. bill: i want to show you new video of the newly elected members of congress arrive, i guess you could call it for the first day of school, continue you? folks from washington state, california, indiana as well. newly elected congressional members now coming for their new member orientation. so we just wanted to share this with you and have a look at what is happening for the beginning of their new life. martha: back to school.

lawmakers returning to work on capitol hill this morning after a seven-week vacation, the ones who already held jobs there. priority number one is trying to reach some kind of deal to avert the so-called fiscal cliff. the u.s. is facing more than $16 trillion in debt. white now there seems to be no plan, a cogent one at this point to move forward on all of that. joined by missouri republican roy blunt who is the vice chairman of the republican conference and on the appropriations committee. good to have you with us senator blunt. >> thank you. martha: talk to me about this fiscal cliff issue. it's scary when you start to dig into the numbers. a lot of folks wondering if simpson-bowles is going to come back up again and how much negotiating both side will actually be able to do. >> i think that's right. it's called a fiscal cliff for a reason and going off a cliff is never a good idea. both the congressional budget office and at the other end of

pennsylvania avenue, the office of management and budget have said if we do this it's going to have recession-like implications on the economy. so surely this is something that nobody should want to do. i think, frankly, this is a great opportunity for the president to step forward, he's just been reelected, he doesn't have to run for office again, and come up with a plan that actually can pass. and i think that means, don't do the across the board cuts, come up with a way to have really targeted cuts and look at ways to increase revenue by one growing the economy, and two, maybe look at the tax code, just like governor romney suggested, you look at tax code and increase revenue without increasing taxes. martha: yes, i think that that is perhaps one of the best areas that some ground might be able to be reached on. we heard from paul ryan on that, he wants to get into the issues of raising revenue. i think there is a little bit of suspicion when you talk about raising tax revenue through economic growth until that economic growth sort of starts

to become evident. in terms of reforming the tax code aren't there ways to eliminate loopholes that would force the wealthy to pay more in taxes and make the whole system a little bit more efficient? >> well, i think any time you make the tax code simpler and fairer that is a good thing, if you can do that. this is one of the things we ought to be looking at. we ought to take the idea off the table that this cliff is an acceptable thing to do. divided government is a good time to solve problems, because everybody has to have their fingerprints on a real solution. if the president thinks it's going to be a solution that only appeals to he and democrats in the senate, or we think it's only a solution that will appeal to republicans in the house we are note going to get anywhere. i'd like to see us begin this process right now. we'll have a divided government for a while but divided government failed the last two years, it needs to work the next two and that's largely dependent on leadership. martha: the president says, look, let's just allow the bush

tax cuts to expire, i mean to stay in place, rather for the middle class and then we'll go back and talk about what we'll do with the wealthy. let's just start right there. what do you say? >> that doesn't sound like much of a negotiation to me. give the president what he wants, then we'll talk about what others think is the right economic thing to do later? i don't believe that is going to work. the president surely knows that is not going to work as well. if the president wants to on the books recover all this revenue from going back to the tax rates of 13 and 14 years ago, that will look good on paper, but it will never produce the kind of revenue, because it's going to have dramatic, negative economic consequences. all his economic advisers surely are telling him that, and so we need a plan here that actually is doable rather than a plan that is still more of 2012 politics. martha: senator blunt, you've been around washington and capitol hill a longtime, and before i let you go i do want to get your thoughts on what you hope will happen with regards to the general petraeus and now the general allen situation.

do you expect that general petraeus will testify in front of congress? and what about eric holder, in terms of what he knew? >> well, i'm on the intelligence committee in the senate. we are going to meet today, and i think we are going to meet again later this week. i don't know if general petraeus will be part of either one of these meetings. i think he does need to come forward and testify, tell us what he knows. i saw the chairman of our committee dianne feinstein just yesterday was concerned that the report that general petraeus was prepared to make is not being released to even the intelligence committees. we need to see that report, in all likelihood we node to talk to general petraeus and find out what he knows and what was going on while he was director as it relates not to his personal activities as much as it relates to our national security activities. martha: why would be that? general petraeus traveled as the head of the cia to benghazi to investigate that. he came back with a report. isn't it customary that that

report would be released almost right away? and why would it not be released? >> i don't think it's customary that it would be released to everybody right away. i believe it is customary that it be released to the house and senate intelligence committees. that's why those committees were set up. this is a system that is almost 40 years old now and it's always worked because every administration understood that they had to tell these selected members of congress what it is that they know, and when they knew it andy think and when they thought it. and we have those meetings two and three times every week. there is no reason this report shouldn't be part of that discussion, and sooner rather than later i agree with dianne feinstein, it's pretty hard to come up with any legitimate reason not to know what general petraeus saw and learned when he was in libya. martha: congress would like to see his report and also to see him testify. we will see. senator blunt, thank you very much. hope to see you soon. bill: in about ten minutes we'll tell you who is meeting at the white house for the first negotiations over the fiscal cliff. this list might surprise you.

growing speculation over a major cabinet reshuffle, who is in, who is out, who is on the sort list to replace them. martha: thousand of sandy victims relying on storm shelters for the basic necessities at this point. we'll take you inside one of these shelters with our medical a team. >> you talk about what their life was like before, what they'll be returning to, some of the good things. they've got their families. kids will be back in school. they'll be a sense of normalcy again. [ timers ringing ] [ male announcer ] it's that time of year. time for campbell's green bean casserole. you'll find the recipe at campbellskitchen.com. ♪ campbell's. it's amazing what soup can do.

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martha: so it is 24 minutes past the hour right now. and most new york public city schools damaged by sandy, we are now learning, will not open until january. what are those kids going to do? the buildings house 18,000 students and are still out of

commission. some students are showing up at the relocation sites but many kids have not made it back to class yet. this will be a big problem for a lot of schools in new york. and a jihaddist with links to the taliban is calling for the destruction of the geza pyramids and. they are taking the threats very seriously. the ash much duke joseph diamond, 76carats and flawless is expected to fetch more than $15 million for some lucky lady in somebody's life. $15million. chump change. we'll see. bill: two weeks after sandy, thousands who fled their homes for storm shelters are starting to grapple with new reality, they have nowhere to go. dr. marc siegl, an associate professor of medicine at nyul

is with us. >> staying in a shelter that is run well, run swell is a key to staying healthy. i visited a very well managed health sister at a high school in northern new jersey where crisis workers from the red cross have been caring for more than 200 displaced people. let's have a look. >> as people are trying to get back to their lives is there a role for informal therapy here? >> absolutely. that is the mental health piece. we are here all day talking to people, sitting at the table, eating meals with them, finding out what is going on. >> how do you give them a sense of control back? >> you talk about what their life was like before, what they'll be returning to, some of the good things. they've got their families. things will be back in school. there will be a sense of normal see again. >> what about post-traumatic stress, how do you prevent that from happening after an event like this. >> part of is is doing it during the crisis so it's not

post-traumatic so it's not coming back at them in three months, six months. it's talking about now, where were you? what was happening? how did it feel? what was the damage. >> how do people make their kids feel safe. >> frame it in a big adventure, like an extended camping trip. >> close confines here. i'm worried about diseases. flu, measles. how do you keep it from happening. >> it's hard to keep it from hang. we make sure that people have clean shower and bathroom facilities. we make sure our food is served at correct temperatures. we use safe food handling techniques and encourage our clients to stay hydrated. >> for victims who are animal owners there is a separate shelter for their pets. >> they will me why you had to bring your pet here to the shelter. >> he would have died. the house is tpraoed freezing. i wasn't going to leave him. would i have stayed home with

him and died with him. >> i thought that chihuahua was going to kill me. he may be crucial to his owner's emotional survival, shelters like this maybe the key to better statistics than after katrina when 35% of people suffered mental problems and many other people suffered injuries and heart attacks from the stress. with the help of well organized shelters and they send these bags out for people going back home, victims of sandy are getting a healthy start to rebuilding their lives. bill: the point you make in there with that woman is getting a sense of normalcy yet again is vital. >> absolutely. returning home and making sure your home is okay, and staying calm and cool with the help of others. bill: great stuff. good advice. dr. marc siegl here in new york. >> good to see you bill. martha: the president of the united states is set to meet with business leaders tomorrow to sort of try to get this economy back on track, but first an audience with labor leaders at the white house. so why is the president talking

to them first? bill: good question. u.n. ambassador susan rice the obama official who went on five sunday shows suggesting that the pentagon r-r attack was part of a spontaneous protest sparked by a video about to get a major promotion? >> i love my jobs at the united nations. i always have, i always will, especially today and i look forward to continuing to serve for as long as president obama would like me to.

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>> word now of major changes that may be coming in president obama's cabinet. a couple of the names being tossed around for key positions have already stirred a little bit of controversy and their way there. molly henneberg joins me live from the white house. one of the most controversial names that we are hearing is who could be the next secretary of state, molly. >> reporter: yes, the ambassador susan rice who is now the current u.s. ambassador to the united nation -ts she may succeed hillary clinton as secretary of state over there at state department according to the "washington post." we've heard ambassador rice's name a lot this fall after she appeared on numerous talk shows after the deadly libya attack and repeated the obama administration's position that the attack was the result of a demonstration turned violent and not a terror attack. and we now know that that is not true. rice may face opposition on capitol hill if the president does nominate her as secretary of state. secretary clinton has not said when she's leaving, but she has

said in the past that she wants to move on and a state department spokesman said that the secretary quote intends to see through the transition of a successor and then she will go back to private life. martha: so interesting watching all of this move around. senator john kerry for the past month or so, there's been a lot of buzz about him, perhaps as secretary of state, that he was interested in that. it sounds like the president may have other plans for him. >> reporter: yes, possibly defense secretary. kerry is a navy veteran and he was very involved in the president's re-election effort. kerry played governor mitt romney in the president's debate prep. his name had been floated as secretary of state. but if ambassador rice gets tapped for that job the post reports that senator kerry may get the nod to the pentagon. kerry's o*fs will say that quote senator kerry's only focus is as senior senator from massachusetts.

leon panetta says he's focusing on looming se sequestration defense and budget cuts and other defense challenges. he also says it's no secret that he wants to get back to his private life in california. martha. martha: we will see. molly, thank you very much. bill: if you had a vineyard in california -- judge you'd want to get back there too. bill: you'd probably be daydreaming about it all day long. a series of high profile meetings get underway at the white house to talk about the looming fiscal cliff. the first group in the door today, labor leaders and progressives from the democratic party base. matt mccall president of penn financial group and jerry willis, host of the willis report on the fox business network. how are you two doing today. good morning to you. the business leaders go to the white house tomorrow, congressional leaders there toward the end of the week. today you get mary k. henry who sedz up the seiu. trump ka.

city employees. dennis vanroco who runs the teachers union. john padest, ruben from move on. what are they going to be pressing for. >> i think it's obvious preaching to the choir. these folks will want to see taxes go higher, particularly on the wealthist of people, and the president has promised tax increases on people earning $250,000 and more. and they'll want to make sure that the entitlement spending is locked down tight that there are no cuts. these are people who are aligned completely with the president's point of view east talked about it for many months now. bill: they drew card number one to get in the door. i mean they are first up. as jerry points out, they are in lock step with how they want taxes to go higher, the tax rates now on wealthy americans over $250,000 a year. >> they are going to pop champagne because they have four more years of obama on their side. they will be very happy about that.

jerry hit it on the head. this meeting is pointless to me. obama is on the same page as them already. we've seen the last four years what stance he's taken as far as the unions are concerned and the progressives. this is patting a lot of people on the back, let's tax the rich, give to the poor and make sure the unions are okay. bill: you don't think the ball is going to move in this meeting. >> no. bill: jerry when do the small business leaders go to the white house and add their concerns. >> let me think, they don't now do they? you'll have head of major corporations. ge, american express, walmart, xerox, pepsi, ibm, one ones of those are small businesses? i don't really hear any of those names, that's what is happening tomorrow. bill: if you had small business leaders go to the white house, what their argument be? >> the argument would be let the business situation environment be easier for us. as a small business owner it's very difficult right now. we don't know where taxes are going, we don't know the situation with healthcare, regulations are increasing every

day. say, hey, listen mr. obama, look what happened over the last four years. businesses had to cutback and stop spending. and by doing that a lot of corporations actually inc increased their bottom line. what the government wants to do is bring in more revenue by taxing but keep spending the same amount. at the end of the day nothing changes. they need to give president obama a business 101 course, stop spending and bring in more revenue. >> the budget is actually going to grow even if the sequester were to go into place okay. the budget would grow. the federal government would continue spending even more. we are on a trajectory that is unsustainable here. bill: could you bend that curve with different policy? >> sure, i am ever hopeful that, and you allowed american business to be incensted to do business, brings would tkpwroerbgs it would list government revenues, it would lift this economy out of its f u.n. k and improve hiring.

>> our current administration believes taxing more brings in more revenue and you spend more -fpblt the problem is when you tax more initially you bring in more revenue. what it leads to is higher unemployment, less people out of work and the consumer will stop spending. that is 70% of our economy. if they stop spending we go into another recession, then what. bill: to both of you that is what mitt romney's argument was. that's what he campaigned on, right? >> exactly. i'll tell you every major business group. the national association of manufacturers. business roundtable are coming out and saying, we have to take care of this fiscal cliff and once more we can't raise taxes on the wealthy because those are the folks that are going to reemploy people and get them back to work. bill: i've often thought is what is going to happen is you're going to kick it three months, six months down the road and you fall into this period of indecision. i don't know if that is going to happen, indeed it's a possibility. matt, if that does happen, which way does the 401k go? >> the exact opposite way we want it to go.

look what's happened since obama came into office. i talked to someone this morning who said these politicians are playing with the economy. it's political posturing back and forth. they want to have their name heard. they don't realize as this is happening the growth in this country is drying up. unemployment will tick up as well. there is no good end to this the longer that this lasts. bill: we have a meeting today with the labor leaders, and the progressive leaders, big business goes tomorrow, then later in the week congressional leaders. thank you, there will be more to talk about on this. check out jeri willis' report only on the fox business network. martha: the red worse is now pushing back against criticism over their hurricane sandy response, calling hit nea it near flawless in its execution. what about the folks on staten island who say they feel they've been forgotten. we will talk to a top red cross executive about that next. bill: national anthem is

american as apple pie. why is this hockey team now trying to get rid of it? >> i go back to the 1960s, with high school hockey, and we've always played the national anthem. i think that it's something that should be done. it's part of our history, and our country, and absolutely should be part of the game.

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national anthem still playing. martha: the american red cross is defending their response to super storm sandy after being frustrated victims slammed the volunteer organization. the red cross says, quote, i think that we are near flawless so far in this operation. i know that there are people who have absolutely lost everything, they are cold, they are frightened, they are saying, where is the american red cross? and i am totally supportive of that. i understand their cry for help. but we are out there, according to the head of the red cross who we spoke with here last week. the red cross has 32 shelters open, housing more than 3200 residents. there are more than 5700 disaster workers on the ground across the east coast serving up more than 5 million meals and snacks as well as distributing nearly 1 million other relief items. let's talk about this a bit this morning with laura howe the vice president of public relations at the american red cross. laura welcome, good to have you here this morning. >> thank you, thank you for having me. martha: you folks have a lot of

folks out there on the ground. the criticism began early. i look at this quote who says, do not donate from the red cross. he said at this stage their response is an absolute disgrace, in terms of the emergency response. what do you say to that criticism? >> we understand that people are frustrated. if i had been without power for two weeks at a time i think i'd be frustrated as well, so we certainly understand that. has this than a perfectly relief operation? no it hasn't. but we do, as you said earlier have nearly 6,000 red cross volunteers on the ground, and those people are doing some really good work every day. they are leaving their homes, they are leaving their families, and businesses to go help their neighbors on the east coast. i think that's what is really important here is that we have a lot of volunteers doing some really heroic work. martha: i think it is very important what you just pointed out. and everyone needs to remember that these are volunteers, and they are out there to help and we just saw a really nice piece

put together by dr. siegel in new jersey where he gave you guys very high marks for the work that you're doing. on the other hand you look at this area in staten island where people have been so hard hit and parts of brooklyn and we have a guest we've been following through this process, we had him back on yesterday and here is what he said. >> this is what they give you, these are called apac meals. i've done cooking and worked in pizza restaurants and other restaurants for some time in high life and i had a problem cooking this food. martha: he claims that the food was hard to cook. he also said that the granola box bars they were given were moldy, the batteries they were given didn't work. what do you say to that? >> first of all i would say that the meals he's pointing out is sort of one of the meals that we are giving out to people. we have a lot of trucks. we've got more than 300 trucks that are driving through neighborhoods on staten island, in brooklyn. the rock aways, some of those most hardest hit areas that are

distributing fresh, hot meals. we have kitchens all over the area where we are partnering with other groups to cook good, hot food. that is just one part of the relief puzzle for us. you know, i would say this too, are we in every single neighborhood that we want to be in? no. but we are everywhere we can be given the resources that we have. so we want people to know that we hear their cries for help, and most people that we encounter are very grateful and very thankful for the help. again, given by all of these many volunteers who are giving their time and giving of themselves on the east coast. martha: what would you tell people who donate to the rez crosto the red cross about whether or not if they want the money to go to hurricane sandy, can they send it directly to sandy victims? >> absolutely. if donors tell us they want their money to be used for sandy we are absolutely going to honor

that. you're right, 91-cents of every dollar does go directly to the victims. we have to keep the lights on here and we have overhead costs and we hope people understand that. but if people want their money to go towards sandy relief we will definitely honor that in those ways people have been giving through tell thopbs, donations at stores and grocery stores. that kind of money we know people intend to go toward sandy relief and we are absolutely going to use it for that. martha: i don't know if you can get hot food out to that neighborhood where christian is. i know he would really appreciate it, i know you are doing the best you can and a lot of volunteers are. thank you for being with us today. we appreciate it. bill: jenna lee is coming up happening now. 11 short minutes away what are you be cook up. jenna: the tangled web, the petraeus affair, what is next, why now, we have answers ahead. what about benghazi?

we are going to get a preview from a closed committee hearing today. what do they want to know and learn this afternoon. we also won't forget our service members serving in afghanistan r-r, and update from there. it is a time of war. bill: you've got it. new details on the deadly meningitis outbreak affecting hundreds of americans. what may have spread the illness and made it worse. we'll tell but that. martha: going above and beyond to return several military medals, just wait until you hear where they were found and who found them.

martha: a good story for you. two young brothers from new york were poking around in an antique store looking for gi joes.

they found three military medals, including a medal of honor. the boys wrote to senators and even president obama to track down the family of the man who won the medals, and they returned them. his name was charles george, and he was from north carolina. he died in korea in combat in 1952. no one knows how the medals ended up in the antique shop but the boys ended up getting their gi joes as a reward. good for them. bill: major developments now in the deadly meningitis outbreak in 19 states. a brand-new report finds that several contamination issues were found at a facility linked to this outbreak. jonathan serrie looking at this live in atlanta. what did the fda inspectors find. >> fda investigators say they found problems with this facility itself. in the report they note cracked and corroded walls, insects and even a flying bird where areas where the compounding pharmacy prepares medications.

gowns, eye protection and gloves used by employ ears not properly sterilized according to the report. inspect erts are alsinspectors are also concerned about the company's products saying they received 33 complaints from patients and doctors saying certain medications lacked appropriate effectiveness. while the company is under separate management from ncc the other compounding pharmacy linked to a deadly fungal meningitis outbreak the two pharmacies were founded by the same pair of brothers in law. bill: what is the state priso the company saying about that. >> they say they are looking at the fda's finding and preparing a written response. they say, quote while ameradoses shows clearly that we have not instances of products over the past years. we are committed to addressing

all observings in order to enhance our existing systems. bill. bill: jonathan serrie. thank you on that story in atlanta as that continues to unfold for us. martha. martha: major challenges ahead for congress over the next seven weeks, what house speaker john boehner faces as he tries to unify a deeply divided republican party, and all over congress they are deeply divided. he's trying to find compromise with the president before the country's finances go over the fiscal cliff. my credit card rewards are easy to remember. with the bankamericard cash wards credit card, i earn 1% cash back everywhere, every time. [ both ] 2% back on groceries. [ all ] 3% on gas! no hoops to jump through. i earn more cash back on the things i buy most. [ woman in pet store ] it's as easy as... [ all ] one! -two. -[ all ] three! [ male announcer ] the bankamericard cash rewards credit card.

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